November 17, 2006
Show Me The Money In VoIP - What's With Vonage Shareholders?
Having once held share options, which couldn't be sold until they matured - thus costing me profit - I find this very odd on the surface: a bunch of major Vonage shareholders have petitioned [Russell Shaw] the US SEC (Securities and Exchange Commission) to delay a change that would make it easier to sell their stock. Insiders and some other shareholders typically have to wait a grace period after an IPO before they can sell. But let's dig deeper.
As Russell points out, one of the petitioners is Jeffrey Citron, Chairman, once worth nearly a billion on paper. Are they trying to suggest to the public that maybe something good is going to happen, hence they don't want to sell their stock just yet? Maybe those with the greatest number of shares are pushing for this so that remaining major shareholders won't bail out and sell off their stock. That makes a great deal of sense. Even though the petitioners own about 2/3 of total shares, a sell-off from the remaining 1/3 might devalue the stock even further, causing the 2/3 owners to lose even more money. Keep in mind that the latter have been invested since the IPO, and they've lost about half their investment.
But pure play VoIP providers like Vonage are not the ones making money in VoIP. For them, I fear, it's going to be an uphill battle. And maybe being acquired might not be such a bad thing. Maybe.
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